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I think we're in the same stage that other "art/trades" have gone through in recent years. If you look at desktop publishing, before 1984 (intro of the Mac), typesetting was a real job! You'd take your idea for a brochure down to the printers, and they'd typeset it for you, and you'd pay for that.
Then, along came Macintosh, with the laserprinter. Suddenly anyone with $2000 could become a "typesetter". And over the subsequent years, as Quark Xpress, Photoshop, Illustrator, etc became commonly available, the graphic design industry felt a lot of heat. But what happened long term? Tons of people tried to do their own ads, brochures, flyers, etc. 99% of them were awful. But the state of graphic design moved forward by leaps and bounds, and today, people who are good at it get paid very well, better than they did 20 years ago, before having absolutely kick-ass graphics was a requirement for businesses.
So, the playing field is being leveled. You won't be able to get work simply because you've got gear. You have to be significantly better than what a band can do themselves, or a guy with a digi002 and a powerbook.
It'll be a shakeout, and a lot of people will leave the "business", of course. But long term, you'll see higher quality recordings becoming more and more desirable, and the people who can produce those recordings will be rewarded.
It's all about skill now. That and reputation. And yes, it is scary, but it's also exciting! Go listen to Myspace bands. 90% of the recordings suck. Bands will screw around with recording themselves until they realize either a. they need to become serious about the recording part of things, or b. they're better off hiring a pro.
Our job is to emphasize what we offer that they don't. Gear? Maybe. But a lot of bands don't even know what an 1176 is, or API pre's etc. But what we do offer is professionalism. We offer tons of experience and knowledge. We offer the ability to get in there and get the project done. Today, not next week.
I think most bands will understand the economics of hiring a pro very soon. It's a bit like Home Depot and the home improvement craze. People all want to "do it yourself." It's cheaper! It's Fun! oh, and the end product looks like crap!
Home Depot's newest initiative, and what they're basing their future growth on? Professional services.
The DIY people will always be there. But home recording is a fad, in a way. When bands start to realize that they're so much better off learning more about their instruments, spending their money on great gear, and promoting themselves, they'll see the light.
Keep on doing what you do, get better, be the best in your market.
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